(Halloween) Trick of the Trade: Accessing a Decedent’s Bank Account Without Probate

An acquaintance of mine recently reached out because his mother passed away with a bank account held in her individual name.  Typically, probate is necessary to give a Personal Representative (Executor) the legal authority via the court to access, manage and distribute the assets titled in the individual name of a decedent at the time of death. However, there is a little-known statute in Massachusetts that permits a surviving spouse or next of kin to withdraw the funds from a decedent’s individual bank account without going through probate.

Massachusetts General Law Chapter 167D, Section 12 (M.G.L.c.167D, §12) states that a bank, at its discretion, may pay to the decedent’s surviving spouse or next of kin, the funds in the decedent’s bank account if the amount is under $10,000 and it has been thirty (30) days or more since the decedent’s date of death. A death certificate must be provided to the bank.  Practically, the bank may choose to decline to pay out the funds in the account, and require a person to be appointed as Personal Representative.  If the bank chooses to proceed with paying the funds to the surviving spouse or next of kin according to the statute, it is released from liability.  It is important to note that the statute is only an option where there is a surviving spouse or clear next of kin, such as children who are all from the marriage of the decedent and surviving spouse.

Unfortunately, the funds in the mother’s account of my acquaintance were a few thousand dollars more than the statutory amount and a voluntary probate will be necessary to access the bank account. If his mother had spoken with an estate planning attorney prior to her passing, the attorney could have advised her on ways to avoid the need for probate by creating a Trust or designating beneficiaries on the account, to name a couple.

At Samuel, Sayward and Baler LLC, we comprehensively educate and advise you about your assets and your options to make it as easy as possible for your family to take action with your assets at your death.  And if no planning is done, or an unknown asset is discovered, we guide your family through the best choices available to access, manage and distribute your assets after your death.

Attorney Abigail V. Poole is a senior associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of trust and estate planning, estate settlement and elder law matters. She is an active member and current President Elect of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA).  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781/461-1020. 

October, 2022

© 2022 Samuel, Sayward & Baler LLC

In Massachusetts, there are three (3) types of probate proceedings to administer the estate of a deceased Massachusetts resident – Voluntary Probate, Informal Probate and Formal Probate. “Probate” is the court process by which assets owned in a deceased individual’s sole name are accessed and distributed by an authorized person known as the Personal Representative (also known as the Executor). The type of probate the Personal Representative requests and receives authorization to administer is important and determined by a variety of factors that are unique to the deceased’s specific estate, including the estate assets, the recipients of those estate assets and their location, and the deceased’s estate plan documents. Below are (5) situations where a Formal Probate may be necessary.

1) Transfer of Real Estate

Sometimes the most valuable estate asset to probate is the deceased’s real estate, such as the deceased’s home or vacation cottage. Real estate may be transferred to the recipients of the estate or, more often than not, sold by the Personal Representative of the estate. Although real estate may be transferred via an Informal Probate, the best practice is to utilize a Formal Probate to transfer real estate. Formal Probate addresses one key title issue up front by determining the statutory recipients (“heirs-at-law”) of the real estate in the event the deceased died without a Will, or in the event the Will is contested and determined invalid. This step is necessary for the Personal Representative to have clear title to the real estate before the property can be transferred or sold. This is especially important when transferring so-called “registered land” that is filed with a county’s Registered Land/Land Court Department. Bottom line: Formal Probate permits the smooth transfer of clear title to real estate between the estate and new owners.

2) Original Last Will and Testament is Lost or Has Handwritten or Deleted Words

Ideally, the Last Will and Testament submitted to the probate court is the signed original and unmarked except for the requisite signatures. However, occasionally the last known original Will is lost, or only an unsigned copy can be found, or the Will has handwritten words or notes added by the deceased, or has words or sections deleted by the deceased. In those situations, a Formal Probate is required to confirm the deceased’s intentions and the validity of the Last Will and Testament. Bottom line: Formal Probate is necessary if the deceased’s signed original Last Will and Testament is lost or altered in any way.

3) The Location or Identity of a Recipient of the Deceased’s Estate Is Unknown

The probate documents submitted to the probate court require the names and addresses of all the deceased’s “heirs-at-law” and all recipients of the deceased’s estate to be listed for a couple of reasons. First, the estate and the court must know to whom (and where) estate assets are to be distributed. Second, heirs-at-law and recipients of the estate assets are entitled to notice of certain rights, such as objecting to the validity of the Will, the appointment of the Personal Representative or the Personal Representative’s management of the estate. In short, if the identity or location of an heir-at-law or recipient is unknown, then that person may not receive an inheritance and will not have the ability to exercise important rights. While the Personal Representative of an estate will often engage the services of a genealogical researcher to find such people, sometimes the search is unsuccessful, or there is another time-sensitive matter that requires submitting documentation to the court as soon as possible. In those cases, a Formal Probate is necessary. Bottom line: Formal Probate is necessary if the location or identity of an estate recipient is unknown.

4) A Recipient of the Deceased’s Estate Is an Incapacitated Person or Minor

As mentioned above, the recipients of the deceased’s estate have certain rights, including the right to receive the assets left to them by the deceased. If the recipient is incapacitated or is a minor child, sometimes it is beneficial to have a separate advocate who can represent the recipient’s interests and accept and manage the inheritance on his or her behalf. This person is known as a Conservator and must be appointed by the court, which may be expensive, take time and result in on-going obligations.

However, in certain cases it is more practical to refrain from involving a Conservator in a relatively simple probate. For example, I have had cases where the deceased’s surviving spouse has late-stage dementia and the couple’s only adult child is the Personal Representative of the deceased’s estate and the Attorney-in-Fact for the surviving spouse. The deceased’s estate is to be distributed entirely to the surviving spouse. In such situations, it is more cost-effective and representative of the intentions of the deceased (and his/her surviving spouse) to file a Formal Probate where the sole adult child can administer the deceased’s estate for the benefit of the surviving spouse recipient. Bottom line: A Formal Probate is necessary if a recipient is incapacitated or a minor child without representation of a Conservator.

5) A Recipient of the Deceased’s Estate Has Since Deceased and No One Is Appointed to Represent the Recipient

Surprisingly, or perhaps not so surprisingly in the last few years, there have been several occasions where the recipient of a deceased’s estate dies soon after the deceased. For example, an elderly married couple where the first spouse dies and a few months later the surviving spouse, who is the recipient of the first spouse’s estate, subsequently dies. Similar to above, one strategy is to first appoint a Personal Representative of the estate of the last spouse to die to represent it via an Informal Probate. However, another strategy is to proceed with a Formal Probate of the estate of the first spouse to die, particularly in time-sensitive situations or where there is a sole adult child responsible for administering both estates. Bottom line: If a Recipient of the deceased’s estate subsequently dies, a Formal Probate is necessary unless a Personal Representative is appointed to represent the Recipient’s estate.

At Samuel Sayward & Baler LLC, we take a comprehensive and strategic approach to probates. An attorney familiar with the process of probate will assess the estate assets, the recipients of those assets and the estate plan documents (if any), consider the intricacies of the estate, and recommend the type of probate proceeding that best fits the deceased’s estate and its administration.

Attorney Abigail V. Poole is a senior associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is an active member and President-Elect of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA). This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.

July, 2022
© 2022 Samuel, Sayward & Baler LLC

 

 

 

By Attorney Abigail V. Poole

After a loved one passes away, sometimes probate of one or more assets held in the deceased’s name is necessary. Probate is the process by which a person is given legal authority by the court to access, manage and distribute the assets titled in the individual name of the deceased at the time of death. There are three (3) common types of probate in Massachusetts from which to select depending on assets, family dynamics, and other factors. The simplest, quickest and least expensive type of probate is a voluntary administration.

A voluntary administration is available if the deceased died with $25,000 or less in total probate assets, plus not more than one (1) vehicle in his or her individual name. Other than the vehicle, the assets can be bank accounts, certificates of deposit, unclaimed property, stock, and savings bonds. However, a voluntary administration may not be filed for estates where the decedent owned an interest in real estate. If a Voluntary Personal Representative later discovers assets that cause the total estate value to be more than $25,000 or the Voluntary Personal Representative requires full legal authority to administer an aspect of the estate, the voluntary administration can be converted to one of the other types of probate.

A great example of when a voluntary administration may be a good fit is the situation where the surviving spouse discovers $15,000 of stock in the deceased spouse’s individual name. The surviving spouse may file a voluntary administration and once the voluntary statement is certified by the court, that surviving spouse will be able to gain access and direct the sale of the stock and distribution of the proceeds, or direct the transfer of the stock to him- or herself.
At Samuel, Sayward and Baler LLC, an experienced attorney will assess the deceased’s assets and other relevant information to assist you with determining the type of probate that best fits your situation. This thoughtful and comprehensive approach to filing for the most suitable probate process means that you will be better prepared to confidently address your current and future estate responsibilities.

Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of trust and estate planning, estate settlement and elder law matters. She is an active member and current President Elect of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA). This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781/461-1020.

May, 2022
© 2022 Samuel, Sayward & Baler LLC